CUBA, CHINA, VENEZUELA: NEW DEVELOPMENTS
Daniel Erikson
Cuba’s international relations have undergone significant shifts in recent years, with old alliances unraveling and new partnerships emerging. In particular, the
Cuban government of Fidel Castro has embarked on
a path of deeper engagement and cooperation with
Venezuela and China that has transformed those two
countries into the most important international allies
of Cuba today. Since 2001, the rising influence of
Venezuela and China constitute the most significant
realignment of Cuba’s foreign relations since the collapse of the Soviet Union in the early 1990s. This is
all the more striking because it has occurred against
the backdrop of modest U.S. efforts to tighten existing sanctions and hasten change in Cuba.
Without question, the emergence of Venezuela’s
Hugo Chavez has provoked the most dramatic
change in Cuba’s international relations in this hemisphere. Elected to the helm of the most significant
oil-producing country in Latin America in the late
1990s, Chavez has steadily proceeded down a path of
closer political and economic ties with Cuba. After
his temporary removal by force in April 2002,
Chavez has become increasingly reliant on the advice
and counsel of Fidel Castro to help maintain his
power in Venezuela. At the same time, Chavez has
offered hundreds of thousands of barrels of discounted oil to the Cuban government, which has helped
the island to keep its rickety economy afloat despite
tougher U.S. measures. The scope and nature of the
Venezuela-Cuba relationship has also sparked concerns that the two governments may seek to advance
proposals that run counter to the strengthening of
market-oriented democracy in the region.
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A second major shift in Cuba’s international profile
is its deepening ties with the People’s Republic of
China, a country of 1.3 billion people that has
achieved sustained growth through introducing market reform into its communist political system. China has prioritized Cuba as a key partner in Latin
America, and quickly surged to become the island’s
third largest trading partner after Venezuela and
Spain. China’s interest in Cuba has led to frequent
high-level meetings, a series of economic cooperation
agreements, and growing exchanges in the areas of
science, technology, and defense. China plans to invest millions in Cuba to help secure needed commodities such as nickel and agricultural products,
and it has been a strong supporter of Cuban positions in international forums such as the United Nations. The emergence of China as an economic power has strongly benefited the Cuban economy and
become a crucial component of the island’s economic
planning.
Cuba’s strong ties with Venezuela and China contrast sharply with its deteriorating relations with other partners. While the European Union remains an
important economic player, Cuba’s dissident crackdown in 2003 and subsequent hostile rhetoric have
cooled relations considerably, despite moves by Spain
to help improve ties. In Latin America, Cuba has experienced a partial renaissance as a large swathe of
South American countries have elected center-left
leaders, including Argentina, Brazil, Paraguay, and
Uruguay. While most countries have been hesitant to
deepen ties with Cuba, almost all have at least established normal diplomatic relations and several have
stepped up their trade and investment with the is-
Cuba, China, Venezuela: New Developments
land. Meanwhile, Cuba’s once staunch alliance with
Mexico has verged on total breakdown during the
administration of President Vicente Fox, mainly because the Mexican government has backed successive
UN resolutions condemning the human rights situation in Cuba.
Of all the world’s major capitals, only in Beijing and
Caracas are Cuba’s claims as a defender of the interests of the third world so attentively received, and
only China and Venezuela are attempting to harness
Cuba as a vehicle for pursuing their own national interests and international objectives. Recent evidence
suggests that any contemplation of Cuba’s present or
future must extend to include the scope and implications of the island’s deepening links with Venezuela
and China.
THE CASTRO-CHAVEZ AXIS
Perhaps no other bilateral relationship within Latin
America has prompted as much speculation and concern as the bond between Castro and Venezuela’s
Hugo Chavez. Chavez, a former army paratrooper
and fiery populist, won the presidency in 1998 with
overwhelming support stemming from his indictment of Venezuela’s corrupt political classes. Chavez
first struck up a friendship with Castro in 1995,
when he was received in Havana with a hero’s welcome following his release from prison for a 1992
coup attempt. As a presidential candidate, Chavez
promoted the concept of “Bolivarian Revolution,” a
mix of economic populism and support for social
programs, couched in leftist terminology. Chavez
traveled to Cuba as president-elect in early 1999,
sealing a very public friendship with Castro that soon
emerged as a political flashpoint in Venezuela’s increasingly polarized electorate.
In October 2000, Chavez and Castro signed the socalled Convenio Integral de Cooperación that has
formed the backbone of the “oil for services” arrangement that is economically crucial to Cuba and politically inflammatory in Venezuela. Under this agreement, Cuba would receive 53,000 barrels of oil a day
at favorable rate of financing, in exchange for providing technical support and advice in areas of education, health care, sports, and scientific research. The
oil shipments from Venezuela represent about onethird of the island’s energy consumption, with an estimated value of $400 million—or one-sixth of total
imports—making Venezuela Cuba’s largest trading
partner. Yet for the state-owned oil company Petróleos de Venezuela (PDVSA), Cuba’s oil imports are
barely significant, representing less than 2 percent of
annual production. During the aborted military coup
that ousted Chavez in April 2002, top PDVSA managers immediately suspended the oil shipments to
Cuba, on the basis that the island had failed to make
payments. Chavez, temporarily chastened by his brief
removal from office and economic troubles marked
by an $8 billion budget deficit, allowed the suspension to persist until August of that year, when the oil
agreement was renewed.
At the time of renewal, several Venezuelan officials
remarked that Cuba had held up its end of the bargain, continuing to provide social and technical assistance during the suspension. Nevertheless, as PDVSA struggled to recover from a damaging antiChavez strike in 2003, Cuba’s missed payments and
favorable treatment further stoked the concerns of
the Venezuelan opposition. In early 2004, the Wall
Street Journal reported that Cuba’s debt to Venezuela’s state-owned oil company had reached $752
million—80 percent of the company’s debt—with
scant effort to collect on the payments by the Venezuelan government.1
Chavez’s open and unapologetic embrace of Fidel
Castro has infuriated Venezuela’s conservative sectors
and conjured up the specter of “Cubanization” of
Venezuela. Cuba’s deployment of thousands of
teachers, doctors, and sports trainers in Venezuela
has sparked considerable intrigue, and the agreement
has generated controversy in both countries. Venezuelan educational and medical groups have expressed
skepticism about the need to import foreigners, while
1. Alexei Barrionuevo and Jose de Cordoba, “For aging Castro, Chavez emerges as vital crutch,” The Wall Street Journal, on-line edition, February 2, 2004.
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the political opposition has seized on the Cuban arrangement as evidence of Castro’s meddling in the
country’s internal affairs. In Cuba, some worry that
the departure of valued professionals for oil-rich
Venezuela will lead to a further decline in a social
safety net deprived of resources and largely dependent on human capital, and there is concern about
becoming overly reliant on Chavez’s potentially precarious hold on power.
For many years, Cuba has conducted a sweeping program of medical diplomacy throughout the developing world, and it is not uncommon to find Cuban
doctors working in the remote reaches of Africa or
Latin America. However, there is no other country
where Cuban specialists have taken on as sweeping a
role as in Venezuela. While estimates vary, the current program involves about 20,000 Cubans, including 14,000 physicians that represent approximately
one-fifth of all Cuban doctors.2 Although this program often involves additional hardships for doctors
who must spend years away from their families, their
tour abroad does yield modest monetary incentives.
The Associated Press has reported that Cuban doctors in Venezuela receive an extra stipend of $186 a
month while the Cuban government continues to
pay the $25 salaries to their families on the island.3
During a two-day meeting in April 2005, Cuba and
Venezuela signed an agreement to increase the number of healthcare workers to 30,000 and implement
ambitious health programs, including the establishment of 1,000 free medical centers, training for
50,000 medical personnel, and surgical treatment for
up to 100,000 Venezuelans in Cuba.4 Meanwhile,
Venezuela has increased oil shipments to Cuba to
90,000 barrels per day. Allegations that the Cuban
specialists are spies or sources of communist indoctrination have become a staple of Venezuelan politics.
While there is evidence that shared intelligence and
defense training between the two countries has increased, the majority of the doctors and educators are
more likely to be exactly what they appear: Cuban
professionals anxious to escape the island’s scarcity
for a chance to earn a little more money. More worrisome, from the U.S. perspective, is that by providing
needed services in Venezuela’s poorest barrios, the
Cubans are bolstering political support for Chavez
among the disenfranchised who have otherwise seen
few promised results from his “Bolivarian revolution.” Paradoxically, then, Castro has played a crucial
role in Chavez’s efforts to maintain his domestic
popularity.
U.S. officials have expressed concern that the two
countries have entered into a strategic alliance to
thwart U.S. objectives in the region. During his time
as the U.S. special envoy to the Western Hemisphere, Otto Reich argued that “we certainly see a
Venezuela-Cuba axis which is broadening and deepening and which is not conducive to the promotion
of democracy and human rights.”5 Indeed, some U.S.
officials have expressed deep concerns that the mix of
Castro’s smarts and Venezuela’s cash could evolve
into a hotbed of anti-American sentiment, lead to the
rise of new leftist movements, and even pose a security threat to the United States and its allies in the region. The collapse of the Bolivian government of
Gonzalo Sanchez de Lozada in 2003, followed by the
resignation of his successor Carlos Mesa in 2005, and
the rise of indigenous leader Evo Morales, have generated rumors regarding this type of involvement.
Outgoing Assistant Secretary of State Roger Noriega
has described Fidel Castro as “nostalgic for destabilizing elected governments” and “increasingly provocative.”6 It is true that many indigenous leaders express
admiration for Castro and Chavez at such left-wing
gatherings as the “Bolivarian Congress of the People,” convened in Caracas in November 2003. At the
same time, Bolivia’s deep poverty, social tensions,
2. “Some of Cuba’s doctors work in Venezuela,” Associated Press, July 13, 2005.
3. Ibid.
4. “Cuba economy: Trade with Venezuela set to expand,” EIU ViewsWire, May 27, 2005.
5. Barrionuevo and de Cordoba, February 2, 2004.
6. George Gedda, “Castro-Chavez ties worry U.S.,” Associated Press, January 6, 2004.
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Cuba, China, Venezuela: New Developments
and history of racial exclusion hold considerable explanatory power regarding the country’s recent instability.7
Over time, Castro and Chavez have steadily moved
from ringside cheerleaders of leftist movements in
the hemisphere to protagonists of sweeping hemispheric proposals with the potential to shape the region’s broader political dynamic. These include the
“Bolivarian Alternative for the Americas,” known as
ALBA—a rejoinder to ALCA, the Spanish acronym
for the U.S.-proposed Free Trade Area of the Americas. Led by Cuba and Venezuela, ALBA represents an
integration agreement that includes trade, investment, and social programs. Thus far, only Venezuela
and Cuba have officially declared “membership” in
this grouping, but other ALBA-related initiatives are
gathering a wider audience. In June 2005, Venezuela
helped to establish PetroCaribe, a joint oil venture
with twelve other Caribbean countries including Cuba. A Venezuela-sponsored regional television network, known as Telesur, has begun to broadcast
throughout the region, and sparked discussions in
the U.S. Congress of creating an alternative antiChavez broadcast. Although Telesur is nominally
backed by Argentina, Cuba, and Uruguay, the Venezuelan government has contributed 70 percent of the
channel’s $10 million start up cost.8
While this alliance clearly has intentions of influencing regional affairs, its impact thus far has been limited. There is no question that Venezuela’s oil is crucial to Cuba, and that Chavez derives some political
benefit from Castro’s support. Yet Chavez owes his
rise to domestic political factors that are entirely independent of Cuba, and the loss of Venezuelan oil
shipments would be a significant but manageable setback for Castro. Cuba’s nearly $2 billion in annual
tourist revenues and hundreds of millions of dollars
in remittances from the U.S. both serve a more important economic role, and the island has made significant strides in developing oil sources for domestic
energy consumption.
Venezuela has scored scant victories in hemispheric
institutions. The U.S.-backed Colombian ambassador Luis Alberto Moreno handily won the recent
election as the head of the Inter-American Development Bank, while the Venezuelan candidate, former
finance minister José Rojas, barely got off the
ground. Venezuela proved more influential during
the election for the new Secretary General of the Organization of American States, by strongly supporting the eventual victor, Chile’s José Miguel Insulza.
That election represented the first time in the organization’s history that the U.S. has failed to secure victory for its preferred candidate, although Insulza is a
respected democratic politician who later publicly assured that “elected governments that do not govern
democratically should be held accountable by the
OAS”—a tacit acknowledgment of U.S. concerns
about Venezuela.
In a public opinion survey released in July 2005, the
Caracas-based polling company Datanálisis showed
that 11.6 percent of respondents approved of using
the Cuban system as a model for Venezuela, while
63.2 percent were opposed. While only a fraction of
Venezuelans have professed to favor the Cuban model, this poll reflects that the sentiment has grown
markedly over the past three years. In an earlier poll
conducted by this company in July 2002, merely 3
percent expressed support for Cuba while 91 percent
were opposed. In January 2005, Venezuelans’ preference for the Cuban model registered at only 6 percent, indicating that most of the growth in sentiment
has occurred in the last six months. Worryingly, this
period has been characterized by Chavez’s public
support for a “new socialism,” dramatic denouncements of supposed “U.S. plots” to assassinate
Chavez, and continued political repression in Venezuela. A separate nationwide poll, carried out by the
firm Sejias & Asociados in late May and early June
2005, revealed that 48 percent of respondents preferred a socialist system over a capitalist system, with
7. “A political awakening,” The Economist, February 21, 2004.
8. “Using oil to spread revolution,” The Economist, July 28, 2005.
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less than 26 percent preferring capitalism.9 While
most hemispheric leaders maintain relations with
both countries, they have steered clear of entangling
alliances and instead focused mainly on regional integration and managing relations with the United
States. The leaders of Venezuela and Cuba have a
penchant for grand rhetoric describing a hemisphere
united against American hegemony, but thus far they
remain a two-man club. Nevertheless, there is a possibility that the pendulum may swing further in their
direction in 2006 brings electoral victories for Evo
Morales in Bolivia, Daniel Ortega in Nicaragua, or
other leftist leaders.
ENTER THE DRAGON: CHINA IN CUBA
Cuba is a longstanding ally of China. On September
1, 1960, Fidel Castro announced the severing of diplomatic ties with Taiwan in favor of a relationship
with China, and the two countries established diplomatic relations on September 28, 1960. Cuba was
the first Latin American country to recognize China,
and the two countries maintained generally cordial
relations from the 1960s to the 1980s, despite periodic tensions caused by Cuba’s near total embrace of
the rival Soviet Union. In December 1984, China
dispatched resident military attaches to Cuba, initiating what has become a series of friendly military contacts. In November 1988, China and Cuba ceased to
require passport visas for travel by their citizens between the two countries.
Cuba’s trade with China topped $600 million dollars
in 1990, but subsequently declined to less than $270
million by 1995, due to the collapse of Cuba’s sugar
industry.10 In February 1995, China and Cuba
signed an Agreement on Cultural, Educational, Scientific and Technical Cooperation, paving the way
for frequent cultural and sports exchanges. The first
joint venture between the two countries was a plant
for manufacturing plastic slippers that was estab-
lished in Cuba in July 1997, with Chinese investment of $2.12 million. The enterprise produced 4
million plastic slippers annually and other cooperative ventures ensued. The China-Cuba Joint Commission on Economic and Trade Cooperation has
met more than a dozen times at the ministerial level.
The 2001 visit to Cuba by Chinese President Jiang
Zemin played a crucial role in reinvigorating the economic and political alliance between the two countries. During this trip, the two countries signed an
Economic and Technical Cooperation Agreement,
which granted Havana a $6.5 million line of interestfree credit, which would be paid over a five year period ending in April 2006. China also granted an additional $200 million to modernize and expand Cuba’s
telecommunications at the local level. In addition, a
$24 million inter-bank agreement was concluded to
finance the Miramar Hotel project located on Havana’s Malecón. The two countries also signed four
bilateral agreements in the areas of sports, educational exchanges, maritime affairs, and preventing tax
evasion and double taxation.11
In 2003, Fidel Castro flew to China and appeared
bemused when he arrived for his first state visit in
more than a decade, telling the head of the Chinese
legislature Li Peng that “I can’t really be sure just
now what kind of China I am visiting, because the
first time I visited your country appeared one way
and now when I visit it appears another way.” He
added, “You can say that every so often, your country
undergoes great changes.”12 The media also noted
that, although Jiang Zemin and Fidel Castro both
addressed each other as “comrade,” they were dressed
in spiffy business suits. Hu Jintao took pains to reassure the Cuban leader that their countries’ socialist
bond remained profound, affirming that “as socialist
countries led by the Communist parties, China and
Cuba share the same ideals and faith. The new lead-
9. The polling figures in this paragraph come from an article by Phil Gunson, “Cuban system gains support in Venezuela,” The Miami
Herald, July 22, 2005. Other interesting data from the Datanálisis survey include that almost half of Venezuelans do not believe that
Chavez intends to create “a second Cuba,” while 37 percent believe this is his goal.
10. Patricia Grogg, “Cuba-China: trade ties growing despite differences in ideology,” Inter-Press Service, September 8, 2004.
11. “China grants Cuba almost 400 million dollars worth of loans,” BBC Monitoring, April 14, 2001.
12. Elisabeth Rosenthal, “China’s Sparkle Bedazzles a Visiting Castro,” New York Times, February 28, 2003.
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Cuba, China, Venezuela: New Developments
ership of China will continue its longstanding friendship with Cuba and make efforts to further bilateral
ties.”13
China and Cuba are economically complementary.
China imports sugar, nickel, and medicines from
Cuba, while exporting rice, kidney beans, and electrical, industrial, and textile products. In 2002, trade
turnover between the two countries reached $430
million, which included China’s exports of $310 million and imports of $120 million.14 The following
year, China added Cuba to its list of official tourism
destinations. At the China International Fair for Investment and Cooperation held in the port city of
Xiamen in September 2004, the delegation from Cuba’s Ministry of Foreign Investment and Cooperation presented 41 proposals for joint ventures with
Chinese enterprises, in sectors including medical
equipment, sugar products, fishing, furniture, and
footwear and garments.15 At that time, the two countries already boasted 10 joint ventures in operation,
including six in Cuba and four in China, in addition
to three cooperative production contracts. The joint
ventures in China focused on pharmaceuticals, advanced medical devices, biotechnology, and genetic
engineering.16 With the help of Chinese investment,
Cuba is due to double its nickel and cobalt production over the next four years.
In November 2004, Chinese President Hu Jintao led
a delegation of trade leaders to Cuba for extensive
meetings with Fidel Castro and top members of his
government. Hu arranged the stop over in Cuba on
his return from the Asia Pacific Economic Cooperation (APEC) summit in Santiago, Chile. Significantly, Cuba was one of only three other countries in addition to Chile that Hu chose to visit during his first
trip to Latin America, the others being Argentina and
Brazil. China’s imports from Cuba have expanded to
include nickel, biotechnology products, fresh and
processed citrus fruits, steel, and tobacco.
Cuban Defense Minister Raul Castro played a highly
visible role during this summit, presiding over a forum of 400 Chinese business leaders and Cuban enterprise managers. During the visit, Hu announced
that “Cuba is one of China’s largest commercial partners in Latin America. We share common ideals allowing us to follow our own path of development
whatever the international situation may be.”17 Fidel
Castro reciprocated by bestowing the Jose Martí
Honorary Order on Hu, taking the opportunity to
rise from his wheelchair for the first time in public
since he broke his knee and arm in a very public accident in the fall of 2004. Castro also announced that
“Socialism will definitively remain as the only real
hope for peace and survival of our species. That is
precisely what the Communist Party of the People’s
Republic of China has demonstrated.”18
During this visit, Hu and Castro signed 16 agreements for cooperation in the areas of nickel and mineral processing and exploration. The accords call for
Cuba to provide 4,400 tons of nickel annually to
China. In addition, China will invest $500 million in
a new Cuban nickel plant in Moa, Holguín province.
China granted the Cuban government a 10-year extension to repay four interest-free loans that Beijing
had provided during the island’s severe economic crisis from 1990 to 1994. China agreed to provide a $6
million grant to Cuban hospitals, and materials for
school uniforms valued at an additional $6 million.
China offered to ship 1 million television sets to Cuba. Indeed, Chinese “Panda” television sets have become synonymous with rewards from the Cuban
government for strong support for the Communist
Party, due to the fact that citizens appointed to head
the neighborhood-watch groups known as the Com-
13. Rosenthal, New York Times, February 28, 2003.
14. China’s Foreign Ministry website.
15. Patricia Grogg, “Cuba-China: trade ties growing despite differences in ideology,” Inter-Press Service, September 8, 2004.
16. Grogg, Inter-Press Service, September 8, 2004.
17. Andrea Rodriguez, “China forges stronger trade relations with Cuba,” Associated Press, November 23, 2004.
18. Rodriguez, Associated Press, November 23, 2004.
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mittees for the Defense of the Revolution often received Panda televisions for their services.
Cuba has also strongly backed China’s goals of eventually reclaiming its “renegade province” of Taiwan
under the “One China” policy. During a visit to
Beijing in March 2005, Cuba’s Minister of Government Ricardo Cabrisas Ruiz vowed continued support for China’s Anti-Secession Law, approved by
China’s National People’s Congress.19 In return,
China has been a forceful opponent of U.S. sanctions
on Cuba at the United Nations and other international bodies. In October 2004, China’s deputy representative to the UN, Zhang Yishan, criticized the
U.S. for its decision to maintain the embargo and
therefore “obstinately stick to the wrong position and
ignore the just demand of the international community.” In April 2005, China vocally expressed its
longstanding opposition to U.S.-led efforts to condemn Cuba for its repression of civil and political liberties. As China’s political and economic clout continues to grow, Cuba is poised to become Beijing’s
most valued beachhead in the Caribbean.
VENEZUELA AND CHINA: DRAWING
CLOSER
The burgeoning Cuba-China relationship has occurred in the context of China’s efforts to pursue
closer ties with Latin America as a whole, including
Venezuela. Hugo Chavez made his first state visit to
China in October 1999, where he met with Chinese
president Jiang Zemin, Premier Zhu Rhonji, and
other leaders. His trip marked the first Venezuelan
presidential visit to China since 1983, and Chavez
brought 24 economic projects seeking cooperation
with the Chinese. In 1999, Venezuela was already
the largest single recipient of Chinese investment in
Latin America, mainly concentrated in two Venezuelan oil fields under development by the China National Petroleum Corporation.
In April 2001, Chinese president Jiang Zemin visited
Venezuela during his six-country swing through Latin America intended to advance trade initiatives and
drum up opposition to a measure to censure China’s
human rights practices at the United Nations. In
Chavez, he found a willing ally, who proclaimed his
admiration for Mao, backed China’s effort to host
the 2008 Olympics, and most importantly, pledged
to oppose the UN resolution. During the visit,
Chavez declared that “we don’t believe any country
in the world has the right to condemn another ... We
are going to vote against the resolution.”20 Chavez
also announced that he would write a letter of condolence to the family of a Chinese fighter pilot who
died in a collision with a U.S. spy plane earlier that
month. The agreements signed during the trip included a $60 million investment in a tractor factory
and a number of accords on energy, mining, agriculture, and taxation. Chavez also said that the two
countries discussed the joint manufacturing of Chinese K-8 and Y-12 military training and cargo planes
in Venezuela.
In 2001, Venezuela’s trade with China totaled $350
million while Chinese investment in Venezuela totaled $530 million in 2000.21 By 2000, trade between China and Venezuela had already hit $351
million, which represented an 86 percent increase
over the prior year.22 In May 2001, Chavez visited
Beijing for a second time for a five day visit, where
Jiang remarked that China had “a positive attitude
towards formulating a ten-year plan of cooperation
between the two countries.”23 During this trip,
Chavez presented Jiang with Venezuela’s top honor,
the Liberator’s medal. A deal was struck for China to
buy Venezuelan oil and provide a crucial loan for
Venezuela’s farming sector. Venezuela and China
have also signed a Strategic Energy Plan that extends
until 2011, which lays out provisions for Venezuela
to increase oil exports to China while boosting its
19. “Cuba backs China’s anti-secession law,” BBC Monitoring, March 18, 2005.
20. Alexandra Olson, “Jiang Visits Venezuela, winning support against human rights resolution,” Associated Press, April 16, 2001.
21. Olson, Associated Press, April 16, 2001.
22. “Venezuela’s Chavez calls for more economic ties with China,” Agence France Presse, May 27, 2001.
23. Agence France Presse, May 24, 2001.
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Cuba, China, Venezuela: New Developments
Figure 1. Trade Patterns Between China, Cuba, and Venezuela
Total Trade (Millions USD)
1600
1400
1200
ChinaCuba
1000
800
ChinaVenezuela
600
400
CubaVenezuela
200
0
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
Source: All Cuban trade data are from the Oficina Nacional de Estadistica, except for 2004. All China-Venezuela data are from the IMF Direction
of Trade Statistics database, except for 2004. The 2004 trade data are based on the following sources: Cuba-China: Xinhua News Agency, June 8,
2005; China-Venezuela: Xinhua News Agency, January 29, 2005; Cuba-Venezuela: Agence France Presse, June 22, 2005.
own agricultural production. China already operates
two oil fields in Venezuela, the Intercampo Norte
and Caracola blocks.
Mindful of Washington’s sensitivities, Chinese President Hu Jintao chose not to visit Venezuela during
his three week tour of Latin America in conjunction
with the APEC Summit in November 2004. Nevertheless, Venezuela remains a central component of
China’s strategy to enhance its economic and political links with Latin America. Venezuela sees China as
a crucial market for its commodity exports, including
not only oil and gas but also steel, aluminum, cocoa,
and coffee. As with other countries in the region,
China has proven willing to invest in improving infrastructure to help facilitate exports—such as developing railway lines and selling train cars. Some analysts have identified a “Beijing Consensus” that offers
an alternative to the market economics and limited
state intervention that was set forth by the “Washington Consensus” in the early 1990s. The guiding
principles of this so-called “Beijing Consensus” that
appeal to the leadership of Cuba and Venezuela
probably include: respect for sovereignty and equality
of nations; strong defense of national interests and
priorities; desire to limit the political and military influence of the United States; and the preference for
step-by-step economic modernization over political
reform.24
In December 2004, Hugo Chavez made his third visit to China, signing oil and gas deals that allowed
Chinese companies to invest $350 million in 15 oil
fields located in eastern Venezuela, as well as an additional $60 million investment in natural gas projects.
Chavez also planned to buy a satellite from China,
and Information Minister Andrés Izarra later said
that the satellite would be placed into orbit within a
year, thereby giving the country “full sovereignty in
its telecommunications.”25 Venezuela also sought to
acquire Chinese radar to improve security along its
border with Colombia, and there are signs that security cooperation will continue. While it is premature
to speak of a China-Cuba-Venezuela axis in the
24. Summarized from Joshua Cooper Ramo, The Beijing Consensus (London: The Foreign Policy Centre, Spring 2004) and “Venezuela: China Cooperation,” Oxford Analytica, November 12, 2004.
25. Venezuela’s Chavez predicts $3 billion in trade with China next year,” Associated Press, December 27, 2004.
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Cuba in Transition
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Western Hemisphere, there is little question that all
three countries are seeking to strengthen bilateral ties
with each other to advance complementary political
and economic interests.
CONCLUSION: CHINA, VENEZUELA, AND
THE CUBAN TRANSITION
During a speech in February 2005, Fidel Castro declared that Cuba was “rising again like a phoenix”
due to its economic ties with China and Venezuela.26
While the island’s economy remains in the doldrums, it is true that Cuba’s economic strategy of
forging ties with China and Venezuela has reaped
important dividends. Subsidized Venezuelan oil has
not prevented recurring blackouts in Cuba, but it has
surely alleviated some of the island’s economic deprivation. China’s large investments in the mining sector and growing interest in tourism and agriculture
also provide Cuba a needed boost.
However, perhaps the most intriguing aspect of these
new alliances concerns the potential impact on Cuba’s eventual transition process once the 78-year old
Fidel Castro eventually leaves the stage. For many
years, the United States has positioned itself as the
unrivalled actor in shaping Cuba’s post-Castro politics. While other countries—especially Canada,
Spain, and the broader European Union—
conducted normal business in Cuba, they similarly
favored the island’s evolution towards a market-oriented democracy. Latin American countries, for their
part, have generally distanced themselves from the
Cuban system in pursuit of economic modernization
and more democratic politics. Once the Soviet
Union collapsed in 1991, Cuba found itself with
trading partners but no true allies who had an interest in perpetuating the Cuban system.
In just a short period of time, this has changed. Cuba
now has two important allies with a stake in the ex-
26. “Cuba,” Oxford Analytica, February 14, 2005.
418
isting system and an interest in maintaining the island’s current political order. In Venezuela’s Hugo
Chavez, Castro has discovered an important partner
with substantial resources. Venezuela has begun to
experiment with its ability to consolidate ties with
the Caribbean countries to create a block of votes at
the Organization of American States, and it may find
new ways to exercise power in the inter-American
system. If so, Venezuela could represent a counterbalance to U.S. actions that may have some ability to
influence other countries in the hemisphere. However, Venezuela’s outreach to Cuba reflects a narrow
decision taken by Chavez and his leadership group.
As such, any leadership change in Caracas would
likely result in rolling back or even breaking off this
alliance.
By contrast, the Chinese involvement in Cuba represents a consensus decision by a ruling party that is
seeking to advance its main interests in the Western
Hemisphere: securing natural resources to feed a rapidly growing economy and stripping Taiwan of its remaining diplomatic allies in the Caribbean and Central America. Moreover, China has a crucial veto on
the UN Security Council that could potentially represent a counterweight to U.S. efforts in pursuit of its
objectives in Cuba. While the Cuban leadership appears to believe that China’s friendship is based on
socialist solidarity, this is probably incorrect. China is
primarily seeking a return on its investment, and if
Cuba fails to deliver economic results then the relationship will cool. In any case, the United States today remains far and away the most important actor
in shaping an international response to post-Castro
Cuba. Still, U.S. policymakers who dream of remaking Cuba should be aware that China and Venezuela
are poised to loom ever larger in Washington’s rearview mirror.